Community Development Financial Institution (CDFI) program evaluation: a luxury but not a necessity?

McCall, Jamie; Hoyman, Michele

doi:10.1080/15575330.2021.1976807

Cited by 3 publications

(2 citation statements)

References 130 publications

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“…The federal Community Development Financial Institutions (CDFI) Fund, established in 1994 to enhance access to mainstream banking in underserved communities like minorities and rural areas, holds the potential to drive improvements in financial inclusion (Sherraden et al, 2018). However, recent evaluations of the program have encountered challenges in determining its impact, with funding issues remaining prevalent (McCall and Hoyman, 2023). In light of our findings, another influential factor is subjective financial knowledge.…”

Section: Odds Ratiomentioning

confidence: 74%

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Financial inclusion, financial capability and financial fragility during COVID-19 pandemic

Kim,

Xiao,

Porto

2023

IJBM

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PurposeFinancial inclusion can be proxied by banking status. The purpose of this study is to investigate the potential effects of financial capability on the financial fragility of US adults with various banking statuses during the COVID-19 pandemic.Design/methodology/approachThis study utilized the 2021 National Financial Capability Study (NFCS) dataset to investigate the relationship between financial capability and financial fragility among consumers with different banking statuses. The analysis controlled for employment shocks, health shocks and other consumer characteristics. Banking statuses included fully banked, under-banked (utilizing both banking and alternative financial services) and unbanked individuals. Logistic regression analyses were conducted on both the entire sample and subsamples based on banking statuses.FindingsThe results showed that financial capability was negatively associated with financial fragility. The magnitude of the potential negative effect of financial capability was the greatest among the fully banked group, followed by the underbanked and unbanked groups. Respondents who were underbanked or unbanked were more likely to experience financial fragility than those who were fully banked. Additionally, respondents who were laid off or furloughed during the pandemic were more likely to experience financial fragility than those without employment shocks. The effect size of financial capability factors was greater than that of COVID-19 shock factors. These results suggest that higher levels of both financial capability and financial inclusion may be effective in reducing the risk of financial fragility.Originality/valueThis study represents one of the first attempts to examine the potential effects of financial capability on financial fragility among consumers with various banking statuses during the COVID-19 pandemic. Furthermore, this study offers new evidence to determine whether COVID-19 shocks, as measured by health and employment status, are associated with financial fragility. Additionally, the effect size of financial capability factors is greater than that of COVID-19 shock factors. The results from the 2021 NFCS dataset provide valuable insights for banking professionals and public policymakers on how to enhance consumer financial wellbeing.

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Section: Odds Ratiomentioning

confidence: 74%

“…, 2018). However, recent evaluations of the program have encountered challenges in determining its impact, with funding issues remaining prevalent (McCall and Hoyman, 2023). In light of our findings, another influential factor is subjective financial knowledge.…”

Section: Discussionmentioning

confidence: 99%